The local favourite, who started the year outside the top 300, overcame a slow start in the National Bank Open final to beat the Japanese star 2-6 6-4 6-1.
The 18-year-old Mboko also joins Faye Urban in 1969 and Bianca Andreescu in 2019 as the only Canadians to win the home event in the open era.
Mboko dropped to her knees after Osaka fired a shot into the net as a raucous packed house burst into cheers around centre court. She ran to hug her family and coaches in the courtside box.
The crowd was so rowdy, the umpire repeatedly asked fans to "please be quiet during the points."
"It's been an incredible week here in Montreal," Mboko told the crowd. "Montreal, je vous aime!"
After the match, when the crowd applauded Osaka with some yelling mixed in, she said: "Thanks, I guess," and did not congratulate Mboko. Osaka later declined to speak to the media.
There were 13 service breaks in 25 games, with Mboko converting eight of nine break points. Fighting a wrist problem after a fall Wednesday, Mboko had 13 double-faults.
Born in Charlotte, North Carolina, to Congolese parents, Mboko grew up in Toronto. She beat four majors champions in the hard-court event, routing top-seeded Coco Gauff 6-1, 6-4 and also topping Osaka, Sofia Kenin and Elena Rybakina.
Osaka, the four-time grand slam champion, had her best performance in a WTA 1000 tournament since also reaching the Miami final in 2022.
She stepped away for 15 months towards the end of that season and had daughter Shai in July 2023. She has been winless since the 2021 Australian Open.
Mboko is the third wild card to win a WTA 1000 title event, following Maria Sharapova at Cincinnati in 2011 and Andreescu at Indian Wells in 2019.
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